ms ajax hover extender error "An extender can't be in a different UpdatePanel than the control it extends"

Question

It is obvious that the control and the extender are in the same update panel. Yet, a "An extender can't be in a different UpdatePanel than the control it extends" error occurs.

NOTE: The user control is declared within an UpdatePanel on the page using it. That makes the UpdatePanel in the user control "nested".

The following code is in the Asp.Net UserControl:

        <asp:TemplateField HeaderStyle-Width="0px">
        <ItemTemplate>
            <asp:UpdatePanel ID="hoverMenuUpdatePanel" runat="server">
                <ContentTemplate>
                    <ajaxtoolkit:HoverMenuExtender ID="extensionActionHoverMenuExtender" runat="server"
                        PopupControlID="extensionActionHoverMenu" PopupPosition="Left" HoverCssClass="popupHover"
                        TargetControlID="extensionActionHoverMenu" OffsetX="5" PopDelay="50" />
                    <asp:Panel ID="extensionActionHoverMenu" runat="server" CssClass="modalDialogPanel"
                        Style="display: none; height: 200px; width: 300px; padding: 5px;">
                        <div style="border-color: #3A362C; padding: 2px; border-right-style: solid; border-right-width: thin;
                            float: left;">
                            <div class="title">
                                Reserve Extension: &nbsp
                                <asp:Label ID="extensionToReserveLabel" runat="server" Text='<%# Eval("ConsolidatedPhoneExtensionPK") %>' />
                            </div>
                            <div id="userType" style="border-style: solid; border-width: 1px; padding: 5px; height: 80px;
                                width: 200px; background-color: #E2DDBA; margin-bottom: 8px;">
                                User Type:
                                <asp:RadioButtonList ID="reservedUserTypeRadioButtonList" runat="server">
                                    <asp:ListItem Selected="true" Text="999/988" Value="Employee" />
                                    <asp:ListItem Text="Other" Value="Other" />
                                </asp:RadioButtonList>
                            </div>
                            <div>
                                Employee No:<asp:TextBox ID="reserveEmployeeNo" runat="server" OnTextChanged="reserveEmployeeNo_TextChanged"
                                    AutoPostBack="true" />
                                <asp:Label ID="employeeNameDisplayLabel" runat="server" />
                                <asp:Label ID="reserveUserMessageAreaLabel" runat="server" />
                            </div>
                        </div>
                        <div>
                            <div>
                                <asp:Button ID="selectButton" runat="server" Text="View" CommandName="Select" Width="75px" />
                            </div>
                            <div>
                                <asp:Button ID="reserveButton" runat="server" Text="Reserve" CommandName="Reserve"
                                    CommandArgument='<%# Eval("ConsolidatedPhoneExtensionPK") %>' Width="75px" />
                            </div>
                        </div>
                    </asp:Panel>
                </ContentTemplate>
                <Triggers>
                    <asp:AsyncPostBackTrigger ControlID="reserveEmployeeNo" EventName="TextChanged" />
                </Triggers>
            </asp:UpdatePanel>
        </ItemTemplate>
    </asp:TemplateField>